Michael Hill Sees Improved Holiday Results

RAPAPORT... Michael Hill’s sales rose during the holiday period, buoyed by
a shift in the company’s marketing strategy, it said Tuesday.

The jeweler’s same-store sales — at branches open for at least a year
— increased 1.3% year on year during the November-to-December period,
but decreased 2.9% for the second fiscal quarter overall. Although sales
fell, performance improved significantly compared to the first quarter, which
saw an 11% drop.

The retailer underestimated how much marketing it needed for
its strategic shift away from discounting, leading to a sharp decline last
quarter, it said. In the three months ending December 31, it made a series of
changes to its marketing activities and event promotions, resulting in a
stronger performance.

In the second quarter, sales at all stores in Australia, the
jeweler’s largest market, fell 4.6% to AUD 106.9 million ($76.9 million). Revenue
in New Zealand slipped 4.8% to NZD 41.8 million ($28.5 million), while proceeds
from Canadian branches rose 4.5% to CAD 49 million ($37 million).

For the first fiscal half, same-store sales fell 6% to AUD 292.7 million ($210.6
million).

Michael Hill closed three stores during the first half, and
opened another six, for a total of 309 stores. The company also shut four Emma
& Roe branches, leaving two stores still operating.

The company is implementing a strategy to become a globally
relevant leader in the premium-jewelry category, it said. To this end, it hired
Daniel Bracken as CEO in September, and last week appointed Andrea Slingsby as
chief operating officer.